Global Macro: Stimulus Cuts Likely to Continue Despite Weak Jobs Reports

NEW YORK (TheStreet) -- Two consecutive months of weak U.S. jobs reports likely won't deter the Federal Reserve from cutting its stimulus program.

Economists had projected nonfarm payroll data would be in the range of 200,000 added jobs per month in December and January, but the numbers fell short both months, leading investors to question the health of the U.S. labor market at a time when the Fed is reducing its bond-purchasing program.

Dallas Fed governor Richard Fisher, told CNBC on Friday that the central bank doesn't base its policy decisions on a single bad number. The statement showed the Fed may not be judging the past two months of weak payroll data too critically.

Based on a four-month moving average of the payroll data, the employment figure has hovered around 180,000 added jobs per month since June. That figure smooths out a few monthly misses, such as the meager 75,000 jobs added in December, and allows for a clearer view of trends in the U.S. labor market.

The 180,000 monthly average is a testament to the economic recovery since 2008, but the figure has yet to consistently come in above the 200,000 monthly jobs threshold that would signify strong employment growth.

Although employment growth has been gradual, the unemployment rate has been falling quickly since last year, partly because of declining civilian participation. Still, financial markets are wondering whether the Fed will start raising rates if the unemployment rate falls to 6.5% as Fed officials had said they would do.

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